Distressed debt weaker again as Brexit news digested; uncertainties weigh on commodities; Intelsat lower

By Stephanie N. Rotondo

Seattle, June 27 – The distressed debt market was again trading lower on Monday, as investors remain wary over the United Kingdom’s vote last week to leave the European Union.

“Things in general continue to drift lower,” a trader said, though he noted that there was “not a ton of volume.

“People are still trying to grasp what Brexit really means but the uncertainty is causing risk-off in general,” he said.

Commodities in particular were taking a hit, as investors shed things like oil and gas and some metals for more “safe haven” materials, such as gold. A stronger dollar was meantime weighing on commodity prices.

For its part, domestic crude oil was down nearly 2% at $46.70 a barrel.

In the oil and gas arena, a trader saw Whiting Petroleum Corp.’s 5% notes due 2019 falling 4½ points to 89½. He also saw California Resources Corp.’s 6% notes due 2024 declining 3 points to 45¾.

At another shop, Chesapeake Energy Corp.’s 6 5/8% notes due 2020 were deemed down 2½ points at 69½.

Elsewhere in the commodity realm, Freeport-McMoRan Inc. bonds were on the more active side, but weaker with the rest of the market, according to sources.

One trader said there were “a multitude of trades” in the 3.55% notes due 2022, which he said fell over 2 points to 84½. The 3 7/8% notes due 2023 dropped 2½ points to 83¾, he said.

A second trader pegged the 2022 paper at 84½, as well, which he said was “down a couple points.”

Intelsat trends down

Intelsat SA saw its Intelsat Jackson Holdings SA unit debt declining in Monday trading.

A trader said the unit’s 8% senior secured notes due 2022 were “active and a good bit lower,” trading around 96. That was “down about 3 points,” he said.

Another trader saw the 5½% notes due 2023 losing 3½ points to close at 60.

Yet another source pegged the 6 5/8% notes due 2022 at 65 bid, off 3 points for the day.

In a regulatory filing on Monday, the Luxembourg-based commercial satellite services provider said that it has been engaged in financing talks with some unaffiliated investment funds. Intelsat is in the process of tendering for three series of notes at the Jackson unit, for cash up to $625 million.

The tender – which was extended for the third time on Friday to this coming Wednesday – is contingent upon the company securing additional financing.

Intelsat said the talks were ongoing and that no deal had yet been reached.

© 2015 Prospect News.
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